Verizon Communications, Inc. (VZ) has sued the U.S. Federal Communications Commission for a second time looking to block its proposed net neutrality rules. But the puzzling thing is that it's not clear what the pair is fighting for.

Last August Google Inc. (GOOG) maker of the world's most used smart phone operating system and most used search engine, teamed up with Verizon Communications, Inc. (VZ), America's largest wireless network, to unveil a net neutrality proposal. While the proposal aimed to block landline companies like Comcast Corp. (COMCSA) from discriminating against data, it contained exceptions for illegal data (e.g. P2P traffic) and wireless traffic (which the proposal argued was too bandwidth restricted to allow customers to freely access the internet).

The FCC, who Verizon and Google hoped would embrace those rules, was dismissive of the proposal. FCC Commissioner Michael Copps remarks [PDF], "Some will claim this announcement moves the discussion forward. That's one of its many problems. It is time to move a decision forward—a decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever, and to put the interests of consumers in front of the interests of giant corporations."

Still when the proposal was finally unveiled, it seemed to take into consideration a lot of what Google and Verizon said, largely exempting wireless traffic from the prohibition on throttling.

Despite that, Verizon made the curious decision to sue the FCC about the proposal, claiming it has no authority to make the rules regulating the internet. Verizon, who throttles its most active data users, was supported by the U.S. House of Representatives who claim that net neutrality is an afront to capitalism. The House argued that net neutrality regulation would prevent telecoms from monetization schemes, such as a charging users per website visit.

Fig 1.: The FCC proposal is unpopular among house Republicans and telecoms, who complain it would prevent a "free market" in which carriers could charge users per-website usage fees. [Source: Fierce Wireless Semina via Wired]

Ironically, Verizon is also supported by some of its enemies. Activist group Free Press has also filed suit against the FCC [PDF] because it complains the proposed rules too closely follow Verizon's suggestion, which they argue illegally exempts wireless traffic from net neutrality provisions. The Free Press argue that all internet connections should be mandated to be neutral, and that rules with exemptions are illegal.

Fig. 2: The FCC has also been sued by net neutrality advocates, the Free Press (pictured here protesting at Google's headquarters), who argues that its rules don't go far enough and illegally exempt wireless carriers like Verizon from some provisions. [Source: CBS Interactive]

For Verizon this is the company's second suit. The last suit was dismissed as the FCC hadn't officially unveiled the net neutrality rules.

While Comcast's attorney acknowledged that Title I, Section 230(b) of the Communications Act, which defines that it is the policy of the United States "to preserve the vibrant and competitive free market that presently exists for the Internet" and "to promote the continued development of the Internet," she disputed that the provision gave the FCC authority to regulate the internet. She said that only Congress can deliver that kind of authority via legislation. The court bought that argument, ruling that the FCC did not have sufficient regulatory authority.

Now that attorney for Comcast -- Helgi G. Walker -- has been hired by Verizon to try to win another round against the FCC.

Fig 3.: Verizon has retained Helgi Walker (pictured; center), a top lawyer who already won a similar case against the FCC for Comcast. [Source: Washington Life]

Verizon senior vice president Michael Glover claims his company is actually a supporter of net neutrality, "Verizon is fully committed to an open Internet. We are deeply concerned by the FCC’s assertion of broad authority to impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers."

However, he calls the new rules "arbitrary" and "capricious".

If the rules are overturned it would likely have little bearing on the overall right to throttle by wireless carriers, which would be allowed under the pending rules. It would, however open the door to Verizon and others charging users per-page-visit (regardless of data use), something that is prohibited under the pending rules.

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